Most infrastructure funds exceeding return targets – Deloitte

Deloitte LLP, the UK member of Deloitte Touche Tohmatsu, says in its 2013 infrastructure investor survey that some 70% of such investors in the London funds community are exceeding targeted returns.

The survey represents the views of 22 infrastructure funds, which is about half of London’s infrastructure community, the professional services firm said.

Among other key findings are:

   – Regulated utilities and transport will be among the most popular sub-classes of infrastructure for investors in the next two years. Interest in areas such as waste, infrastructure services and PFI/PPP has dropped, other than for specialist funds

   – Western Europe, in particular the UK, Germany and Scandinavia, remains the most popular geography for infrastructure investors, followed closely by North America and Australasia. There has been a drop off in investor interest in markets such as India and China

   – 41% of infrastructure funds have recruited dedicated asset management teams, which now typically comprise over one-third of their total workforce 

   – When asked to state the main risks facing investments in European infrastructure, 35% cited regulation and 29% said political risk

   – 73% said that lenders’ appetite for infrastructure, relative to other assets, is high (32%) or very high (41%)

The impact of politics on this area is felt in a number of says. One is to impact supply of infrastructure coming to market, with Deloitte noting that there is a lack of disposals by European major utilities and governments, which is set to increase competition across the sector.

Generally, the expectations are for the regulatory environment to become “more challenging” in coming years.

This was Deloitte’s third survey of the sector, having previously published results in 2007 and 2010.




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